Don’t be paranoid, but take precautions. I use Bitcoin for whatever I want to, nobody knows how much I have, and I sleep quietly at night. Of course, I don’t engage in criminal activity—that’s outside my threat model. I just want—no, I demand privacy; and I have it, at the expense of some large effort. It’s worthwhile!
Thanks, I appreciate all the information and links. I've got a lot of reading ahead of me. I've always been scared of what kind of files the blockchain analysis companies already have on us. I can't for the life of me remember many of the transactions I've made with bitcoins over the years, and it's scary to think that Chainalysis knows more about them than I do! :-[
When bitcoins were trading in the $200s in a seemingly neverending bear market, none of this seemed to matter. Now that we're trading above $10k: life comes at you fast....
Happy to help. I wish I had a better and easier answer at the ready.
What you say reminds me of thoughts I’ve had over who has recordings of my telephone calls, or copies of long-past (unencrypted) e-mails. My own communications, as of which I myself have no record outside scattered memories—with those, it’s impossible to be certain of who has or doesn’t have what. My calls to my fondly remembered old ex-girlfriend in $YEAR; who may have archival recordings of those? I think it’s probable that some database has it all. The situation with the blockchain is worse, since it is public and permanent; although other data which could be cross-correlated with it may be another “who recorded what when?” situation, depending on what you did and how in terms of buying, spending, etc. At least, you also have a copy of the blockchain.
Looking a few steps further:
Do you surf the Web without Tor or similar measures? Do you remember every website you’ve ever visited? Do you remember every search term you have ever typed into Google? (People tell Google secrets which they would never tell their spouses, best friends, clergy, or psychiatrists. When they have trouble sleeping, people openly tell Google their midnight fears and fantasies. The Google search is the closest thing to mind-reading technology yet invented. “I’m feeling lucky.”)
Somewhere, there is definitely a record of these things; or somewheres plural, not only in government agencies. Inasmuch as this data may oft be in the hands of private companies such as Google or your ISP, it is used for “marketing” purposes. You are eyeballs and a piece of meat.
In a similar vein, do you carry a mobile phone? (I ask this rhetorically; I would not suggest that you answer such questions on a public forum!) If you do, then somewhere, there is a database which knows precisely where you were physically located on, say, the date of 2010-03-09 at 10:04 in the morning. Do you know exactly where you were on 2010-03-09 at 10:04 in the morning? Somebody does—well, a computer somewhere does. If you were to ever become interesting (in the sense of a “person of interest”), then a wetware analyst could look back at that years or decades later, and correlate it with other available information. That includes, but is not limited to, the calls and texts you made with that phone (metadata and/or content). It also includes the locations and communications of persons carrying phones around you. Do you remember who was near you and whom you associated with on 2010-03-09 at 10:04 in the morning? Somewhere, there is a database which remembers that.
Such is the meaning of dragnet mass surveillance. It is the total destruction of even the most basic dignity. It respects nothing sacred, leaves no part of you untouched and inviolate, admits no freedom. It fears no gods, but deifies itself with omniscience and omnipotence. It is an invisible collar around your neck, from your cradle to your grave. “If you’re not doing anything wrong, you have nothing to hide.” No! Because I do nothing wrong, I have nothing to show. I am a man, not a worm; therefore, my life is none of your business.
My location on 2010-03-09 at 10:04 in the morning, and my activities, communications, relationships, “social graph”, finances, reading habits, and innermost thoughts, are all none of your business.
Let these thoughts sink into your gut, and you will begin to understand why I care about privacy. Most people don’t get it. Encrypted e-mail, anonymized Internet, cash at the store, and antipathy for GoogFaceTwit? People will look at you funny, at best (and thus the first rule of privacy: be discreet about privacy). But once you start to think the full history of your blockchain transactions, your credit cards, your bank accounts, your phone calls, your locational information, your e-mails, your web surfing, your web searches, etc., etc.—well, then privacy begins to make sense. It even makes sense to expend effort and endure inconvenience, to obtain privacy. Actually, when you begin to understand these matters, you realize that the lack of privacy is outright insane.
Thanks for thinking about these issues. Everybody who cares about privacy can make the world a tiny bit of a better place. And good luck with securing your Bitcoin privacy. Bitcoin has great promise as a force for freedom, which necessarily encompasses privacy; but thus far, its tools are as yet imperfect, and the privacy part is very difficult to get right. At least, you certainly have more control of your own destiny with Bitcoin than you do with banks and credit cards. Consider how your ownership of your private keys means nobody can help you if you lose them. Here likewise, Bitcoin gives you the power over yourself, and thus the responsibility for yourself—two sides of the same coin!
